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Industrial Grinders N.V.
by Rohan S. Weerasinghe M. Edgar BarrettFocuses on a relevant cost decision. Which costs are relevant for the decision? How should they be taken into account?
La Grande Alliance-Restaurant Francaise
by Claudine B. Malone Carliss Y. BaldwinPricing of meals for exclusive French restaurant.
Healing the 800-Pound Gorilla: The Future of Health Care
by Scott D. Anthony Erik A. Roth Clayton M. ChristensenThis chapter examines whether theories of innovation apply to health care. One possible root cause of the health care crisis is a focus on the wrong kind of quality. In fact, today's one-size-fits-all system does a poor job of meeting patients' varying demands for quality. Disruptive innovations can help address these problems.
Innovation Overseas: Using Theory to Assess Corporate and Country Strategies
by Scott D. Anthony Erik A. Roth Clayton M. ChristensenThis chapter asks the question; what insights do the theories of innovation provide about a country's macroeconomic strategy? If countries whose economic systems facilitate and motivate disruption have better long-term growth prospects, what can the government do at a broad level to encourage disruptive innovation?
Breaking the Wire: The Future of Telecommunications
by Scott D. Anthony Erik A. Roth Clayton M. ChristensenThis chapter focuses on the telecommunications industry as a microcosm of the dynamics of disruptive change. The chapter evaluates four specific developments--voice-over internet protocol, cable telephony, wireless data, and activities in fringe markets, such as instant messaging--and examines what broad implications each may have for the industry.
Alignment: A Source of Economic Value
by Robert S. Kaplan David P. NortonCorporations must continually search for ways to make the whole more valuable than the sum of its parts. Alignment is critical if enterprises are to achieve synergies throughout their business and support units. This chapter illustrates that enterprises enjoying the greatest benefits from their performance management systems (based on Strategy Maps and Balanced Scorecards) are much better at aligning their corporate, business unit, and support unit strategies, indicating that alignment, much like the synchronism achieved by a high-performance rowing crew, produces dramatic benefits.
Corporate Strategy and Structure: Historical Perspective
by Robert S. Kaplan David P. NortonOrganizations have struggled for more than a century to find the ideal structures to manage their strategies. From Adam Smith's prototypical pin factory to the strategy-focused organization, this chapter provides an historical perspective on the evolution of the organization, illuminating how Balanced Scorecard innovation enables companies to design their operating systems to align structure with strategy.
Limited Editions, Inc.
by Dennis P. FrolinDescribes a new venture: production of figurines in limited quantities as works of art and investments. Company guarantees to repurchase at original price.
Aligning Financial and Customer Strategies
by Robert S. Kaplan David P. NortonEnterprises can create organizational synergies in many ways. Using case studies from companies like Hilton Hotels and Citizen Schools, this chapter describes how private-sector companies, public-sector agencies, and nonprofit organizations have created enterprise-derived value through specific attention to financial and customer synergies.
Aligning Internal Process and Learning and Growth Strategies: Integrated Strategic Themes
by Robert S. Kaplan David P. NortonAn enterprise can achieve significant economies of scale when it centralizes key processes--such as production, distribution, purchasing, human resource management, or risk management--to serve its diverse business units. This chapter explores the opportunities organizations can exploit by aligning their internal business processes and their intangible assets to achieve enterprise-level synergies. Four types of enterprise value propositions, including shared processes and services, and corporate-level strategic themes, are discussed.
Aligning Support Functions
by Robert S. Kaplan David P. NortonOrganizations create shareholder value by aligning their business units with corporate strategy. But organizations also create value by aligning their support units with business unit strategy. This chapter looks at how support units contribute to organizational synergies when they align their activities with business unit and enterprise priorities.
Cascading: The Process
by Robert S. Kaplan David P. NortonCorporations follow different paths to achieve enterprise-wide alignment. An organization can cascade the Balanced Scorecard and Strategy Map management system top-down or bottom-up, but ultimately scorecard reporting, analysis, and decision making should be flowing in both directions. This chapter focuses on organizations that start at the corporate level and then cascade sequentially down the organizational hierarchy, providing examples of successful adopters.
Aligning Boards and Investors
by Robert S. Kaplan David P. NortonWith the increased emphasis on corporate governance, executives are now creating additional corporate value by using the Balanced Scorecard to enhance governance processes and to improve communication with shareholders. This chapter examines a three-part Balanced Scorecard-based governance system that offers directors streamlined and strategic information for making decisions about the company's future directions and its reporting and disclosure policies.
Aligning External Partners
by Robert S. Kaplan David P. NortonThe final component in an organization alignment program is for the enterprise to build scorecards with strategic external partners, such as key suppliers, customers, and alliances. This chapter looks at the process of reaching consensus about the objectives for relationships with external partners, creating understanding and trust across organizational boundaries, reducing transaction costs, and minimizing misalignment between the two parties.
Cash Flow and the Time Value of Money
by Sherman C. Frey Jr.With the use of charts and examples, gives a detailed description of cash flows, the time value of money, and discounted cash flow analysis.
Del Norte Paper Co. (A)
by William A. Sahlman M. Edgar BarrettDeals with a transfer pricing problem in a complex, international situation. A broad range of issues are present in the case, or are needed for a thorough case analysis. Such issues include: relevant costs; the appropriateness of profit centers; the appropriateness of decentralization; international funds transfers; and the measurement of integrated profit.
Chemalite, Inc.
by David A. WilsonA chemical engineer who has set up a company to manufacture and market one of his inventions is trying to prepare his state of the corporation report. This case is designed to serve as a vehicle to introduce students to basic bookkeeping and accounting functions.
Managing the Alignment Process
by Robert S. Kaplan David P. NortonAlignment is not a one-time event. Change is constant--in industry, among competitors, in the regulatory and macroeconomic environments, and in technology, customers, and employees--forcing strategy and its implementation to continually evolve. This chapter looks at how advocating the institution of an office of strategy management emphasizes proactive management of cooperation across organizational boundaries in order to combat the forces that make an organization aligned at one time to soon become unaligned.
Total Strategic Alignment
by Robert S. Kaplan David P. NortonThe Balanced Scorecard has evolved into the centerpiece of sophisticated systems employed to manage the execution of strategy, ensuring companies the ability to align all units, processes, and systems. In this chapter, the authors outline a simple management framework for strategy execution and examine the four necessary components for total strategic alignment: strategic fit, organization alignment, human capital alignment, and alignment of planning and control systems.
Rosemont Hill Health Center
by David W. YoungAn administrator of a neighborhood health center is considering changing his cost accounting system from a single cost per visit to a cost per visit for each department in the center. Used to illustrate several issues related to cost accounting in health care: decisions on cost objectives and cost centers; overhead allocation mechanisms; the distinction between service and production cost centers; and others. Requires preparation of a simple step-down.
Freemark Abbey Winery
by William S. KraskerFreemark Abbey must decide whether to harvest in view of the possibility of rain. Rain could damage the crop but delaying the harvest would be risky. On the other hand, rain could be beneficial and greatly increase the value of the resulting wine. This decision is further complicated by the fact that ripe Riesling grapes can be vinified in two ways, resulting in two different styles of wine. Their relative prices would depend on the uncertain preference of consumers two years later, when the wine is bottled and sold.
Gotham Giants
by William S. KraskerThe owner of a professional baseball team is trying to figure out if promotions are having an effect on ticket sales, and if televising games is hurting attendance. He considers renegotiating the television contract.
Chemical Bank: Allocation of Profits
by Kenneth A. Merchant Carolyn M. BitettiDescribes a conflict between the metropolitan (branch banking) and treasury groups at the bank. The issue is which group should receive the profits generated by a product involving both: Due bills. It is a form of transfer pricing problem, but in a unique (i.e., service) setting.
Controls at the Sands Hotel and Casino
by Jeffrey M. Traynor Kenneth A. MerchantDescribes the controls used in the casino over the blackjack game and cash stocks, and movements of cash. Also describes the results measures available in the casino and their limitations for control purposes.
Waltham Motors Division
by William J. Bruns Jr.Loss of a major contract has reduced production volume below the level expected when budget and standard costs were determined. Apparently favorable results for monthly operations result from reduced volume rather than operating efficiency. Rewritten version of a case by the same author.